Upcoming quarterly results of major companies in the machinery, infrastructure services and multi-industry domains are poised to benefit from a continued expansion in the US manufacturing sector and strong demand trends, Truist Securities said Thursday.
The manufacturing sector has now expanded for six straight months following a three-year contraction, according to the brokerage.
"Demand trends remain strong across the group, with continued support from secular growth tailwinds associated with power, data center, (artificial intelligence), aerospace and defense, (heating, ventilation, and air conditioning), and infrastructure," Truist analysts, including Jamie Cook, said in a note to clients.
These are complemented by improving demand across construction, commercial vehicles, semiconductors, oil and gas, as well as mining, according to Cook.
"While farm equipment markets remain depressed in 2026, there is some optimism for market improvement above the trough heading into 2027," Cook wrote. "We expect order trends in the second quarter to remain strong and that strength in orders should begin to translate more into organic growth, which has lagged."
Within machinery, Caterpillar (CAT) is likely to deliver another strong quarter and beat sales and margin outlook, driven by power and construction business, as well as reaccelerating oil and gas, and mining divisions, according to the note.
"For farm equipment, we believe the focus will be more on the setup for 2027 and Deere's (DE) commentary on the early order program for 2027 after disappointing in 2026," Cook said.
Truist expects infrastructure solutions company Quanta Services (PWR) to post an earnings beat and raise guidance. Underappreciated data center and pipeline opportunities are likely key upside drivers for MasTec (MTZ), according to Truist. "MasTec has already communicated to the market confidence in its ability to grow (earnings per share) at a 20% (compound annual growth rate) through 2028," Cook wrote.
The brokerage said it would be buyers of Parker-Hannifin (PH) at existing levels.
"We believe (Parker-Hannifin's) modestly disappointing industrial incremental margins were contained in the last quarter and that the setup for (2027) is strong, with the potential to deliver healthy incrementals in both industrial and aerospace," Cook said.
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